AOL still hanging in there thanks to dial-up

AOL’s latest quarterly earnings showed growth in its content and advertising business as the company posted a 2% gain in revenue from a year ago and earnings per share of $0.32.

This is a big turnaround for AOL, which for years had been depending on its legacy dial-up subscription business — yes, dial-up is still a lucrative revenue source for AOL — for profit as its content and advertising business struggled.

Another good sign for the company may be a 14% growth in revenue in its brand group, which consists of its in-house media properties like the Huffington Post, AOL.com and TechCrunch. AOL networks, which represent its third-party advertising service, was also up 8%.

AOL needs to rethink its strategy for the long term because it can’t depend on dial-up revenue for long since that has been shrinking for them steadily over the years. The brand group is proving successful for them, but they are still in the negative. The gap is starting to close as the brand groups losses shrank by 71%, but it is still bad that it is not yet profitable for them.

AOL won’t be able to hang on much longer to its thin thread of dial-up subscribers, so expect some big changes to the company in the coming years as they refocus their brand.